NHPC share price increases by over 8% despite mixed prospect views from brokerages

In the quarter ended December 2023, the state-owned NHPC saw a 19% decline in its consolidated net profit, bringing it to ₹628.44 crore. The company’s total income also decreased from ₹2,691.34 crore to ₹2,549.69 crore during the same period. Expenses increased to ₹1,727.85 crore from ₹1,303.06 crore due to material damage and business loss caused by Teesta River flash floods in October 2023.

The Teesta River flash floods impacted power facilities, resulting in poor generation and lower income for NHPC. The company incurred increased costs amounting to ₹340 crore, offset by ₹300 crore in other revenue from possible insurance claims. Consequently, the brokerage JM Financial downgraded NHPC to SELL from ADD, citing sharp stock performance and taking valuations to 2X P/B and 16X P/E on FY2025E.

On the other hand, the NHPC share price surged over 8% after a 15% fall in Monday’s session post-Q3 results. Although the longer-term trend for NHPC is up, the stock could trade with higher volatility in the near term. Major support is seen around ₹70, and any declines towards this support in the near future would be a good buying opportunity according to Ruchit Jain, Lead Research Analyst at 5paisa.

In conclusion, NHPC’s financial performance for the quarter ending December 2023 was impacted by the Teesta River flash floods, resulting in a decline in net profit and total income. The company is facing challenges in expenses and profits growth, leading to a downgrade in its rating by brokerage JM Financial. However, the NHPC share price saw a surge after a significant fall, presenting a potential buying opportunity for investors despite the stock’s near-term volatility.